More Skins Limitations In PA Could Prevent Online Gambling Growth

Online gambling was approved as a part of a comprehensive gambling expansion package passed by the state in October 2017. Since that time, the Pennsylvania Gaming Control Board (PGCB) has been creating regulations to govern online gambling operations in the state and fine-tuning its licensing process.

The first sets of regulations related to online casinos and online poker in PA did not address whether there would be a limit on the number of online gambling websites, otherwise known as skins, licensees can launch under a single license.

New Jersey limits the number of skins allowed under a single internet gambling licensee to five. Experts claim this has helped maximize revenue for both operators and the state. However, representatives from PA’s top-grossing Parx Casino, and Hollywood Casino at Penn National Race Course, still asked gaming board officials to limit the number of skins in PA to as little as one.

This appeared to be an effort to prevent online gambling from eating away at existing land-based casino revenues. Even though most in the industry believe allowing multiple skins will be good for the casino industry as a whole, helping grow revenues online and off.

Addressing the skins issue

At the beginning of April, the PGCB’s Executive Director Kevin O’Toole finally updated its temporary regulations to address the skins issue.

According to O’Toole, there will be no limitations on the number of skins a licensee may employ. However, branding must make it clear which licensee each skin is operating under.

No other state where online gambling has launched has used this stipulation. Plus, even further, never-before-seen limitations are also being placed on PA online gambling licensees when it comes to skins.

One of these regulations will limit players to a single account per operating platform. Even if there are multiple skins operating on that platform.

It has not been determined how this regulation will be implemented. However, it appears players will only be able to create one account with each license holder in the state, and use it on all skins operating under that licensee.

Limitations on skins may equal limitations on revenue

This may not be an issue from a player perspective. However, industry analyst Steve Ruddock claims this and other regulations on skins will only hurt the local online gambling business.

Ruddock says much like high tax rates and a prohibition of online gambling at land-based casinos, how PA is handling the skins issue seems to be turning into a form of self-sabotage.

He claims that limits and limitations on skins only serve to:

Make PA a less desirable market for those interested in launching a skin

Prevent the industry from reaching its revenue potential

Lead to higher operating costs

Present fewer choices for consumers

Lead to less money spent on marketing

Prevent competition and innovation

Cost the state millions in licensing fees

On the other side of the coin, Ed Andrewes, head of Resorts Casino’s online operations in New Jersey, says New Jersey proves multiple skins are necessary to create a competitive marketplace. One that also provides an incentive for operators to spend money on marketing.

He also says operators who think limiting skins will save them money on marketing costs must understand that a less money spent on marketing only leads to less growth in the market as a whole.

PGCB is still in the process of defining online gambling regulations for the state. However, PA casinos started applying for online gambling licenses beginning April 16.